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Article
Publication date: 11 July 2023

Ramona Zharfpeykan and Chris Akroyd

This paper aims to evaluate the outcome effectiveness of the global reporting initiatives (GRI) transitions by understanding how companies have responded to the changes from G3.1…

Abstract

Purpose

This paper aims to evaluate the outcome effectiveness of the global reporting initiatives (GRI) transitions by understanding how companies have responded to the changes from G3.1 to G4 and finally to the GRI Standards.

Design/methodology/approach

A quality disclosure score is developed that incorporates assessments of both the quality of disclosures and the materiality of Australian companies. To analyse materiality, survey data were collected from 187 companies. Disclosure scores are based on a content analysis of the sustainability reports of 12 mining and metals companies and 12 financial services companies that used the GRI Standards from 2011 to 2019 (a total of 213 reports).

Findings

The study found that the GRI transitions have not led to companies improving the quality of their disclosures on areas considered important for them to achieve their social and environmental goals. Instead, the companies tended to use a greenwashing strategy, where the quality of disclosure of material issues declined or fluctuated over time.

Practical implications

From a practical perspective, the disclosure score developed in this paper enables managers of companies to recognize a threshold of completeness and to summarize the areas that are not materially relevant to their business.

Social implications

The results are potentially helpful for investors, shareholders and other stakeholders, enabling them to better understand sustainability reports.

Originality/value

This study contributes to the body of research in sustainability reporting by providing evidence on the outcome effectiveness of the latest updates in the GRI framework.

Details

Sustainability Accounting, Management and Policy Journal, vol. 14 no. 6
Type: Research Article
ISSN: 2040-8021

Keywords

Open Access
Article
Publication date: 5 January 2023

Stefanía Carolina Posadas, Silvia Ruiz-Blanco, Belen Fernandez-Feijoo and Lara Tarquinio

This paper aims to analyse the impact of the European Union (EU) Directive on the quality of sustainability reporting under the institutional theory lens. Specifically, the…

2720

Abstract

Purpose

This paper aims to analyse the impact of the European Union (EU) Directive on the quality of sustainability reporting under the institutional theory lens. Specifically, the authors evaluate what kind of institutional pressure has the highest impact on the quality of corporate disclosure on sustainability issues.

Design/methodology/approach

The authors build a quality index based on the content analysis of sustainability information disclosed, before and after the transposition of the Directive, by Italian and Spanish companies belonging to different industries. The authors use an OLS regression model to analyse the effect of coercive, normative and mimetic forces on the quality of the sustainability reports.

Findings

The results highlight that normative and mimetic mechanisms positively affect the quality of sustainability reporting, whereas there is no evidence regarding coercive mechanisms, indicating that the new requirements do not provide a significant contribution to the development of better reporting practices, at least in the two analysed countries.

Originality/value

To the best of the authors’ knowledge, this is one of the few studies assessing the quality of sustainability reporting through an analysis involving the period before and after the implementation of the EU Directive. It enriches the literature on institutional theory by analysing how the different dimensions of isomorphism affect the quality of information disclosed by companies according to the EU requirements. It contributes to a better understanding of the impact of the non-financial information Directive, and the results of this paper can be relevant for regulators, practitioners and academia, especially in view of the adoption of the new Corporate Sustainability Reporting Directive proposal.

Details

Meditari Accountancy Research, vol. 31 no. 7
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 2 November 2022

Moses Elaigwu, Salau Olarinoye Abdulmalik and Hassnain Raghib Talab

This paper aims to examine the effect of corporate integrity and external assurance on Sustainability Reporting Quality (SRQ) of Malaysian public listed companies.

Abstract

Purpose

This paper aims to examine the effect of corporate integrity and external assurance on Sustainability Reporting Quality (SRQ) of Malaysian public listed companies.

Design/methodology/approach

The study uses a longitudinal sample of 2,463 firm-year observations of non-financial firms listed on the main board of Bursa Malaysia from 2015 to 2019. The study employed panel regression that is, Fixed Effect (FE) Robust Standard Error estimation technique to test its hypotheses.

Findings

The panel regression results reveal that corporate integrity and external assurance positively and significantly influence the quality of sustainability reporting. Though the positive association shows an improvement in the SRQ of the sampled firms, it needs an improvement as the disclosure is more general and qualitative than quantitative. The present improvement in SRQ might result from some regulatory changes like the Sustainability Practice Note 9 Updates of Bursa Malaysia 2017 and the Revised MCCG Principle A to C within the same period.

Research limitations/implications

The study adopts a purely quantitative approach and call for a qualitative investigation in the area in the future.

Practical implications

The study has policy implication for the government and regulators to strengthen compliance with the sustainability reporting guide and the Practice Note 9 Updates. It also has implication for corporate integrity and external assurance for companies, to enhance SRQ and achieve sustainable development.

Originality/value

The study bridged literature gaps by offering new insights and empirical evidence on the role of corporate integrity in SRQ, which has received no empirical attention in the Malaysian context.

Details

Asia-Pacific Journal of Business Administration, vol. 16 no. 2
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 16 March 2015

Breeda Comyns and Frank Figge

The purpose of this paper is to explore the evolution of greenhouse gas (GHG) reporting quality and to determine whether the evolution of reporting quality is linked with the type…

3357

Abstract

Purpose

The purpose of this paper is to explore the evolution of greenhouse gas (GHG) reporting quality and to determine whether the evolution of reporting quality is linked with the type of information reported based on the “search”, “experience”, and “credence” typology.

Design/methodology/approach

The method is based on the content analysis of GHG reporting in 245 sustainability reports by 45 oil and gas companies between 1998 and 2010. The content analysis disclosure index developed links GHG reporting requirements with seven quality dimensions. The information associated with each item on the content analysis index is classified as “search”, “experience” or “credence”. Statistical analysis is used to determine whether any significant change occurred in either overall GHG reporting quality or in the quality of reporting in any of the individual dimensions of quality over the period of the study.

Findings

GHG reporting quality has not improved significantly between 1998 and 2010. The quality of reporting is not the same in each of the seven dimensions of quality and this can be explained by information typology.

Originality/value

This paper provides the first longitudinal analysis of the quality of GHG reporting. The methodology developed advances current measures of reporting quality by linking reporting requirements with particular quality dimensions. The results show that the type of information is important in terms of quality evolution and that this can dictate the measures required to improve quality.

Details

Accounting, Auditing & Accountability Journal, vol. 28 no. 3
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 7 June 2018

Muhammad Bilal Farooq, Ammad Ahmed and Muhammad Nadeem

The purpose of this study is to develop a sustainability reporter classification matrix (hereafter referred to as the “matrix”) to explain why some reporters publish…

Abstract

Purpose

The purpose of this study is to develop a sustainability reporter classification matrix (hereafter referred to as the “matrix”) to explain why some reporters publish better-quality sustainability reports than others and why some reporters experience improvements in the quality of their sustainability reports while others experience no improvement or a decline in sustainability report quality.

Design/methodology/approach

The study draws on the existing literature, which is analysed using a combination of legitimacy theory (i.e. commitment to sustainability reporting) and resource-based view (RBV, i.e. competencies in sustainability reporting).

Findings

A two-dimensional matrix is developed representing organisations’ competencies in (explained using the RBV) and commitment to (explained using legitimacy theory) sustainability reporting. Based on these two dimensions the matrix identifies four reporter classifications: incompetent uncommitted reporters (who publish low-quality reports); competent uncommitted reporters (who publish average-quality reports); incompetent committed reporters (who publish average-quality reports); and competent committed reporters (who publish high-quality reports). The matrix explains how reporters can transition from one quadrant/classification to another and how this transition can be either forward (moving from a lower quadrant to a higher quadrant), resulting in improvements in report quality, or backward (moving from a higher quadrant to a lower quadrant), leading to a deterioration in disclosure quality.

Originality/value

The study builds on the extant literature, combining legitimacy theory with the RBV, to provide a more complete explanation for why organisations publish sustainability reports of varying quality and why this quality varies over time. These insights can also be used to explain variations in the quality of integrated reports. The matrix may prove useful to practitioners as a tool for classifying reporters, identifying issues, assessing risk and tracking progress made.

Details

Meditari Accountancy Research, vol. 26 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 28 April 2022

Kwadjo Appiagyei, Hadrian Geri Djajadikerta and Saiyidi Mat Roni

This study aims to examine the relationship and effect of integrated reporting (IR) quality on sustainability performance and explore the relationships and effects of corporate…

1330

Abstract

Purpose

This study aims to examine the relationship and effect of integrated reporting (IR) quality on sustainability performance and explore the relationships and effects of corporate governance mechanisms on IR quality and sustainability performance.

Design/methodology/approach

Partial least squares structural equation modelling (PLS-SEM) was used in a longitudinal study by following the steps in Roemer’s Evolutionary Model on a sample of listed companies on the Johannesburg Stock Exchange (JSE) in South Africa for a period from 2011 to 2016.

Findings

This study finds board effectiveness and external audit quality to be important determinants of IR quality. It also observes a strong effect of the IR quality on sustainability performance.

Originality/value

This study contributes by using and analysing a longitudinal data set from JSE, currently the only capital market globally requiring the mandatory IR application since 2010.

Article
Publication date: 13 December 2021

Olayinka Erin, Alex Adegboye and Omololu Adex Bamigboye

This study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria.

1836

Abstract

Purpose

This study aims to examine the association between corporate governance and sustainability reporting quality of listed firms in Nigeria.

Design/methodology/approach

The authors measure corporate governance using board governance variables (board size, board independence, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting). The authors measured sustainability reporting quality using a scoring system, which ranges between 0 and 4. The highest score is achieved when sustainability reporting is independently assured by an audit firm. The lowest score refers to the absence of sustainability reporting. The study emphasizes 120 listed firms on Nigeria Stock Exchange using the ordered logistic regression technique.

Findings

The results indicate that board governance variables (board size, board gender diversity and board expertise) and audit committee attributes (audit committee size, audit expertise and audit meeting) are significantly associated with sustainability reporting quality. Additional analysis reveals that external assurance contributes to the quality of sustainability reporting through corporate governance characteristics.

Research limitations/implications

This study is restricted to a single country. Future studies should consider a cross-country study, which may help to establish a comparative analysis. Likewise, the future study could consider other regression techniques using a continuous measurement of the global reporting initiative in measuring sustainability reporting quality.

Practical implications

This study’s findings have important implications for policymakers and practitioners, especially the corporate executives and top management. Companies are encouraged to restructure their board to enhance better monitoring and support towards better sustainability reporting.

Social implications

Disclosure on sustainability reporting helps corporate organizations advance the issues of sustainability both nationally and globally.

Originality/value

This current study adds to accounting literature by examining how corporate governance contributes to sustainability reporting practices within the Nigerian context. Drawing from the result, the study provides strong interconnectivity between the corporate board and audit committee in driving sustainability reporting quality within an organizational context.

Details

Sustainability Accounting, Management and Policy Journal, vol. 13 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

Open Access
Article
Publication date: 13 September 2022

Swaminathan Ramanathan and Raine Isaksson

This paper explores quality science and quality management as a potential pathway to resolve the challenges of corporate sustainability reporting (CSR) by establishing the need…

4507

Abstract

Purpose

This paper explores quality science and quality management as a potential pathway to resolve the challenges of corporate sustainability reporting (CSR) by establishing the need for a common understanding of sustainability and sustainable development.

Design/methodology/approach

Secondary research on key documents released by regulatory institutions working at the intersection of sustainability, corporate reporting, measurement and academic papers on quality science and management.

Findings

Existing measurement frameworks of CSR are limited. They are neither aligned nor appropriate for accurately measuring a company's ecological footprint for mitigating climate change. Quality for sustainability (Q4S) could be a conceptual framework to bring about an appropriate level of measurability to better align sustainability reporting to stakeholder needs.

Research limitations/implications

There is a lack of primary data. The research is based on secondary literature review. The implications of Q4S as a framework could inform research studies connected to sustainable tourism, energy transition and sustainable buildings.

Practical implications

The paper connects to CSR stakeholders, sustainability managers, company leaderships and boards.

Social implications

The implications of sustainability on people, purpose and prosperity are a part of World Economic Forum's stakeholder capitalism.

Originality/value

This paper fills a research gap on diagnosing and understanding the key reporting challenges emerging from the lack sustainability definitions.

Details

The TQM Journal, vol. 35 no. 5
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 18 May 2022

Shidi Dong, Lei Xu and Ron P. McIver

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs…

1119

Abstract

Purpose

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs) sustainability disclosures.

Design/methodology/approach

Using univariate statistical and multiple regression analyses, this study quantitatively examines the impacts of coercive pressure from the government and stock exchanges, imitation within subsectors and normative pressure from industry associations and regulators on the quality of China’s listed FIs’ sustainability disclosures. Assessment of the robustness of regression results uses panel random-effects and generalized methods of moments estimation.

Findings

Financial sector corporate social responsibility (CSR) disclosure quality did not increase dramatically following issue of the “Guiding Opinions on Establishing a Green Finance System.” However, a convergence in quality is found over time. State ownership concentration and state links to dominant shareholders negatively impact the quality of financial sector sustainability disclosures, whereas stock exchange index listing requirements and industry association reporting guidance have positive influences.

Research limitations/implications

First, data availability limits the sample to listed financial firms with RKS quality scores. Thus, results may not be generalizable to the broader listed and unlisted financial sector. Second, this study only examines the influence of external forces based on institutional theory. However, internal institutional forces, such as corporate governance, may require examination. This study’s results indicate that coercive pressure, as represented by issue of the “Green Finance” policy, has not yet prompted the financial sector to improve reporting quality; however, normative pressure has had significant influence in influencing FIs’ CSR practices, with China’s banks potentially taking a leading role.

Originality/value

The financial sector has a lower direct environmental impact than traditional polluting industries and different operating and reporting structures, features often used to argue for its exclusion in prior studies. However, its indirect environmental impact via lending and investing activities is significant, suggesting evidence on the determinants of sustainability disclosure quality is required. This study uses evidence from China’s financial sector to reduce this gap in the literature.

Details

Meditari Accountancy Research, vol. 31 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 5 March 2021

Muhammad Bilal Farooq, Rashid Zaman, Dania Sarraj and Fahad Khalid

This paper aims to evaluate the extent of materiality assessment disclosures in sustainability reports and their determinants. The study examines the disclosure practices of…

2817

Abstract

Purpose

This paper aims to evaluate the extent of materiality assessment disclosures in sustainability reports and their determinants. The study examines the disclosure practices of listed companies based in the member states of the Cooperation Council for the Arab States of the Gulf, colloquially referred to as the Gulf Cooperation Council (GCC).

Design/methodology/approach

First, the materiality assessment disclosures were scored through a content analysis of sustainability reports published by listed GCC companies during a five-year period from 2013 to 2017. Second, a fixed effect ordered logic regression was used to examine the determinants of materiality assessment disclosures.

Findings

While sustainability reporting rates improved across the sample period, a significant majority of listed GCC companies do not engage in sustainability reporting. The use of internationally recognised standards has also declined. While reporters provide more information on their materiality assessment, the number of sustainability reports that offer information on how the reporter identifies material issues has declined. These trends potentially indicate the existence of managerial capture. Materiality assessment disclosure scores are positively influenced by higher financial performance (Return on Assets), lower leverage and better corporate governance. However, company size and market-to-book ratio do not influence materiality assessment disclosures.

Practical implications

The findings may prove useful to managers responsible for preparing sustainability reports who can benefit from the examples of materiality assessment disclosures. An evaluation of the materiality assessment should be included in the scope of assurance engagements and practitioners can use the examples of best practice when evaluating sustainability reports. Stock exchanges may consider developing improved corporate governance guidelines as these will lead to materiality assessment disclosures.

Social implications

The findings may assist in improving sustainability reporting quality, through better materiality assessment disclosures. This will allow corporate stakeholders to evaluate the reporting entities underlying processes, which leads to transparency and corporate accountability. Improved corporate sustainability reporting supports the GCC commitment to implement the United Nations Sustainable Development Goals and transition to sustainable development.

Originality/value

This study addresses the call for greater research examining materiality within a sustainability reporting context. This is the first paper to examine sustainability reporting quality in the GCC region, focussing particularly on materiality assessment disclosures.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 5
Type: Research Article
ISSN: 2040-8021

Keywords

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